Member Article

Web 2.0: The 'Why'

With Justin Souter of Souter Consulting

Part 3 of a series of articles on the application of Web 2.0

All eyes yesterday were fixed on Barack Obama, who (as well as winning the race for the US presidency) used online tools decisively to market himself, raise money, and to organise his supporters online. This article explains why you should also consider using such tools, and provides some hard numbers to boot.

Web 2.0 scenarios are many and varied: use online forums to support your customers, and reduce your call centre costs at the same time (e.g. AT&T); the Anglican Church of Australia has improved collaboration with its stakeholders; UNICEF and an animal shelter both marketed themselves and raised money online (another great marketing example is Procter & Gamble). Other success stories are recounted here and here.

Cloud computing is said to lead to business benefits such as lower up-front costs, faster time to market, reduced financial risk, lower capital costs, lower operational costs, decreased downtime and costly delays, and the possibility of additional services for little extra money [phew!]. In turn, collaboration & community software can “grow your market, connect your team, and accelerate sales”.

Looking past these claims and trying to calculate return-on-investment for these tools is not straightforward, but Dell claims to have made $1m sales using Twitter. A wiki vendor states that “its common for our customers to reduce email volume by 30%”. A related calculation suggests that by using a wiki to reduce e-mail “a 30-man company with a £1,000,000 payroll, [can save] £250,000”.

Helpfully, industry analyst Forrester has estimated that the value to General Motors of running its Fast Lane blog is $180k in savings due to not running focus groups. They also estimate a community support forum saves $1m for a company with 5m customers; and on a turnover of $25m, ratings and reviews for products on your website could add $400k.

An example of SME success is John Tuggle, Guitar Teacher, a useful case study, as is the success of local firm Rozmic. SMEs have already caught the bug: when asked if they believe online social networking has a place in the business world, 55% of small business owners said yes. On a wider scale, Universal McCann have found that “36% think more positively about companies that have blogs”.

This week’s Economist states: “There is strong demand for technologies that do the same for less money, rather than more for the same price”. I suggest you look no further!

There’s so much more information on Web 2.0 which we just couldn’t fit in the bdaily bulletin today - go to our website for more resources relating to today’s article.

Feel free to ask any questions at bdaily.info or on our own site, and join us next Wednesday when we’ll be looking at the ‘when’ of Web 2.0.

This was posted in Bdaily's Members' News section by Supreme Ice Cream .